6/15/17 was up 1.55. It has been a long time since we have seen packers throwing that kind of money at hogs. The model projects that the component on yesterday's kill will spurt upward between +0.85 and +1.15. With that kind of money, packers were able to purchase 98.6% of the moving average daily purchases of Index hogs. They did not do nearly as well with their total hog purchases. The USDA reported that packers only purchased 73.1% of the total daily hog purchases. This suggests to me that they are not finding hogs from other sources so they are turning to the index hogs and laying the money on them.

There was a touch of weakness in cutouts yesterday but not enough to suggest that demand is decaying away. Actually cutouts are higher than one-year ago by +7.50.

No matter how hard I try to squeeze into my bear skin coat, I just can't seem to get it to fit. My view of the weakness we have seen in hogs the past few days is more driven by technical/emotional factors than the underlying fundamentals. Logic tells me that in the final analysis fundamentals will prevail.

Keynes said, "In the long run we are all dead!"

Maybe what hogs prices do will not be that significant in the final analysis.

But for now I am still long the NNNs.

Best wishes,

dhm